Simpler access to Child Trust Funds to be allowed under new legislation revealed by the government, replacing complex Court of Protection process.
The reforms are expected to allow parents and carers to go directly to Child Trust Fund providers to access savings, solving years of unnecessary anguish for an estimated 63,000 to 126,000 young adults and allowing young people lacking the mental capacity to make financial decisions will finally have easier access to their savings.
The MoJ say Child Trust Fund were introduced in 2005 to provide children a financial boost as they start adulthood, but the scheme made no provision for 18-year-olds who lacked the mental capacity to manage their finances without a straightforward way to access their savings.
Campaigners, disability charities, and the financial services sector will help shape the new process, alongside the government working with various stakeholders to explore how the new process is designed, including who can access funds, what evidence is required and what proportionate safeguards are necessary to protect young people who lack mental capacity.
Justice minister, Jake Richards said: “Young people who lack the mental capacity to make financial decisions should be able to access their savings as easily as possible – especially when this money was put aside by loved ones to help them take their first steps into adulthood.
“This is simply an injustice that we’re finally putting right and as campaigners have argued for years, change is long overdue. This legislation will ensure this group of young adults no longer face difficulty from accessing money that is rightfully theirs.”
The government will bring forward an amendment to the Financial Services and Markets Bill to enable the new scheme, with the details to be set out in secondary legislation following Parliamentary approval.
Anna Bird, CEO of charity for families with disabled children, Contact commented: “We warmly welcome the government’s commitment to legislate for a simpler way for young disabled people to access savings in Child Trust Funds.
“For too long, tens of thousands of young disabled people and their families have faced a complicated and costly process to access money that rightfully belongs to them.
“This marks a significant breakthrough after six years of determined campaigning led by parent carer Andrew Turner, whom Contact has proudly supported.”
Andrew Turner, parent campaigner, said: “This bold move from the government is extremely positive news for tens of thousands of young people who have been locked out of their Child Trust Fund savings.
“By removing the barriers that make it hard for people to invest in child savings schemes for disabled children, you also create the opportunity to build a stronger financial foundation for their future.
“A simpler process for accessing these savings will release millions of pounds of benefit and help reduce the administrative burden on parents supporting a disabled child.”
